How could the board kick out a CEO founder given the vertiginous increase in equity valuations said founder presided over? Because those valuations are only meaningful to end investors (i.e. the LPs) when shareholders experience positive cash flow. At Uber the opposite is happening. Why shouldn't we assume, then, that the board realizes Uber is headed for a fatal pinch[0] and has acted accordingly?
Bloomberg in April reported[1] Uber's cumulative cash burn at US$8 bn since its founding in 2009. You can argue that Travis Kalanick presided over rising valuations but so far there is no evidence of an increase in book value per share. Conversely that cash burn risks being crystallized as "value destruction" if revenue growth stalls.
The alleged personnel issues, the lawsuit, the bad press -- they are history and the firm has no choice but to cope with them. But failing to improve net margin can be quickly fatal and if that is happening then the other issues remain relevant. TK, who also presided over those, becomes part of the problem rather than part of the solution.
Bloomberg in April reported[1] Uber's cumulative cash burn at US$8 bn since its founding in 2009. You can argue that Travis Kalanick presided over rising valuations but so far there is no evidence of an increase in book value per share. Conversely that cash burn risks being crystallized as "value destruction" if revenue growth stalls.
The alleged personnel issues, the lawsuit, the bad press -- they are history and the firm has no choice but to cope with them. But failing to improve net margin can be quickly fatal and if that is happening then the other issues remain relevant. TK, who also presided over those, becomes part of the problem rather than part of the solution.
[0] http://paulgraham.com/pinch.html [1] https://www.bloomberg.com/news/articles/2017-04-14/embattled...